Since the conclusion of the pandemic, the price activity of Bitcoin (BTC) and Ethereum (ETH) has been comparable to that of tech stocks, according to Bloomberg News.
The 40-day correlation between Bitcoin and Nasdaq, according to the research, is at 0.6945, the highest it has ever been.
As a result, some analysts are speculating that Bitcoin may not be the diversifier that many of its proponents portray it to be.
Arthur Hayes, a co-founder of BitMEX, is one such supporter. According to Hayes, the price of BTC could reach $1 million in the future. In a new Medium opinion piece, he addressed the buy or sell debate as well as the present link between the crypto and stock markets.
This is bad for crypto, according to Hayes, because it is supposed to be a hedge. He went on to say that given the significant link between the two, advising people to buy crypto in anticipation of a NASDAQ catastrophe would be foolish.
Hayes, on the other hand, feels that regardless of what happens with cryptocurrency, tech stocks will fall. He pointed out that rising interest rates, along with slowing economic growth and low global liquidity, will inevitably lead to this.
Hayes further pointed out that NASDAQ’s present price levels have only been maintained because the market is dominated by a few profitable corporations.
More than 40% of the index is held by Tesla, Microsoft, Google, and Apple, and their stock performance has been decent, even though they have had some downturns.
According to this study, Hayes believes that the crypto market’s worst is yet to come, as a dip in the NASDAQ would also result in a drop in the value of crypto assets. He believes that by the second quarter of this year, Bitcoin’s value will be about $30,000.
According to Hayes, this may not happen if the link between Bitcoin and the NASDAQ index falls before the NDX’s inevitable implosion.